tv Nightly Business Report PBS August 31, 2017 5:00pm-5:31pm PDT
this is "nightly business report" with tyler mathisen and sue herera. >> turning the page. august is done. and it was better than most expected. investors?ght september hold pump pain. damage from hurricane harvey disrupts the nation's largest refinery causes a spike in gas day. how high magt they go and how long will they stay there? has powerful hedge fund industry a bit concerneded. all that and more tonight on "nightly business report" for good evening and welcome. tyler mathisen is off this evening. august has come and gone and it
wasn't as bad as many feared, since it's historically one of the worst performing months. the dow rose 55 points. nasdaq climbed 60, the s&p 500 added 14. for the month, all three indexes were higher, but it was the mo for the dow and the s&p. dominic chu has more. >> it was supposed to be a terrible mon was suggesting, but august turned out n expected. the major u.s. stom indices ended up higher with the nasdaq kensho,site leading the way, over the last 20 year, august e s&p falling an average of almost 1.5% for the no month. this large stock index got a mix from different sectors like technology and more defensive areas like utilities really h p
helping lead the charge. meanwhile, telecom and energy related stocks r were among the biggest drags, but one theme continues to play out in 2017. and was reenforced in august as well. and that's the outperformance of higher growth oriented stocks over value stocks. as for what's on tap for september, recent history prints a less optimistic picture. over the last 20 year, is the third worst month with an average decline of three quarters of a percent. investors will have to keep a close eye on washington. for "nightly business report," the new yoexchange >> so, what will the markets be watc pointed out, isn't that great? art hogan joins us.
good to see you as always. how do you feel going into september? given the fact that august was a bit of a surprise. >> it really was. it's hard the really ascertain anything from august. our volumes were low. they usually are if in august. even more so this august. so the moves the index has made i don't think tell the real story. i don't think you want to see leadership in utilities. i don't you want to se coming d. it did. dominic points. congress gets back september h 5th. budget to get t s shifting to tax reform and tax cuts. and that's a lot to swallow in a short period of time, so i think it's you know, if we're going to see something in this market, it probably happens in september and in and around either the su or failure of washington to get something accomplished. we've got many deloins in septembeno does wha in texas with harvey though change the
political con vversation surroundinbu >> well, it does and it doesn't. so, it does on the debt ceiling. i don't think anyone's going to stand in the way of the debt ceiling getting raised. no one wants to play chicken with that. but you know when we think about the magnitude of the federal package, it's going to have to down to rebuild in those areas affect ed by harvey, thats goind o f the month, the first part will get the ceiling raised. easiest of the task. to your point, when you think of something north of $100 billion that will be needed in aid in the short run, it's going to change the scope and scale of the budget and what can get passed. that needs to get done by the end o the month. hogan. and now, let's turn to texas where new problems are popping up in the aftermath of harvey. one hospital in beaumont evacuated patients and stopped
emergency services because flooding shut down the town's water system and the government is starting to get an idea of the scope of the housing damage. >> it looks like around about 100,000 affected homes. that's a big number. we have 10,000 affected homes, all with different degrees of insurance. some with flood, some uninsured. i'll have to address those on a case by case basis as we move forward. >> if that's not enough, the nation's largest refinery reportedly may be closed for as long as two weeks and the colonial pipeline, the biggest fuel system in the country, partially shutting down lines. that caused gasoline futures to spike to the highest level in two years. morgan brennan h the flood waters begin to recede, more critical infrastructure is feel iing the effects of h >> the colonial pipeline has been shut down. that is a major deliverer of refined product to the
southeastern united states. gas prices are going to go up. because of the c supply. >> the pipeline says outages in some of its supply points and lack of actual products are causing disruptions. roughly quarter of u.s. refining capacity is offline if in the gulf right now and that means few uer petroleum products move ing around the country. privately he the biggest pipelines in the u.s., transporting more than 3 million barrels, gasoline, diesel and jet fuel per day to cities like nashville, atlanta, washington, d.c. and eve the company says two lines are down from houston to herbert, but operating east of lake le deliveries at warrant will quote the intermittent on terminal and refinery supply, but the goal is sunday.n to servi still, experts say getting the energy complex u running will be a complicated process. move the product, to e we
receive the product necessaros . particularly as they open up . so, the it's a matter of variables that come together. >> but it's not just colonial. the explorer pipeline with northbound capacity of more than a half a million barrels we are day is down from houston to tulle a a sa, with ripple effects reaching as far as chicago. it's helping to send gasoline prices soaring. aaa says the national average is $2.45 or ten cents higher than just a week ago and in key states like georgia and missouri that's service d by the pipelin x the moves s the prices will continue to climb and in some cases, there may be temporary thornshortages. in up today, lining up at stations
r "nightly business report," i'm morgan brennan. >> let's turn to john who was on talk energy and gas prices. he's back to tell us how high he thinks the prices could go and c pipeline and one of the largest refineries will last. good to have you back, john. you correctly predicted what morgan just outlined in terms of the gas price, but since we had you on, the pipeline was partially shut down. hat seems to be one of the most developmen. >> that's right. and i believe we've raised pipeline. have it maintain its pressure and get the product to where it needs to be. that's what we're seeing now. hopefully, they get to get it back on sunday. what's exacerbating the situation is the big holiday weekend is here. this is one of the biggest driving weekend of the year lab
fourth of july and memorial day and until the holiday shopping season rolls around. supply in the olks should b system. the northeast has its own of sea born product and it is coming from europe and european product that's on its way gulf of mexico, so there will be more supply on the way, but morgan referenced the national average, 2.45. i think that could go as $3 for a brief amount of time. zpl so, a spike. >> it won't last long. prices will return back down to the.50 mark in the skent week . how long do you it's going to take to get motiva facility back online? they are swamped with water, still. >> wamped and th an unfot development. that refinery had been hanging in there almost until the very
last moments when harvey came back. it tells he they had to go into an emergency or cold shutdown, which you can gather isn't good. it's hard to come back from those. they're not orderly, so the two weeks could be a lowball guess and it could be longer. we will miss thsupply des bratl. >> john, thank you very much. another problem, a chemical plant northeast of houston flooding knocked out the plant's cooling systems, causing kem and cals to rea officials say there could be to come. scott cohn joins us from crosby, texas, with the latest. always good to see you. tell us what the latest is there? >> well, sue, this is one of the many consequences of this storm. they say this has never happened. six feet of rain six feet of
flood waters inundated the this0 miles outside of houston. that meant they lost power. they lost their generators. they're dealing with kem chemicals, peroxid cold and snu, what happened was if they don't get cold, they catch fire. that's what happened. there have been some minor pops or explosions and that's still a risk. when the chemicals get warm, there's a chemical reaction. >> when they generate heat, there's a possibility of a fire and explosion. >> the basic chemical reaction, continues to play out and all they can do is jus these fires burn not just because of the flood waters, but becauer p stopping the chemicals f
>> they won't answer our phone call. they trying to act like this ain't their fault, but it is and they need to step up and start responding to people and the people that got displaced due to this, th need to goat the checkbook out. >> that's david phelps, one of the 300 or so residents who were evacuated here. t of the risk of more fires and potentially explosions. they say that the itself is not toxic, but knock shouse, irritate iing. >> scott, thank much. scott cohn joining us from crosby, texas. the dallas federal reserve bank pre says economic growth will take a hit after harvey, but will return to no normal. the at growing 3.3% in the third quarter. down af a percent from
last week's estimates and a day after the president was touting tax reform, steve liesman sat down with the treasury secretary, who said there is a plan and it would be released in the next few weeks. that president trump promoted a plan without dedale, said thereto a plan and it would be released within the next few weeks. >> originally, our goal had been august. unfortunately, things got derayed a bit. but we'r tra to get this done by the end of the year. so you're going to see the details come out later this t committee process. and we expect the house and the senate will get this to the president to sign this year and we couldn't be more excited about progress we've made. >> hbs the administration is aiming for a revenue neutral bill, one that w but said it wo depend on how much growth the joint tax committee attributes to those tax cuts and he played down apparent differences between the fed and mrg on the
critical issue of changing the post crisis bank regulations. >> i had breakfast with fed chair yellen this mornin meet o have previous treasury including regulation and one of the areas we are focused on with the fed is ficking the e treasury put out a report on what we believe are regulatory changes. i would describe about 70 or 80% of them we can work with the regulatoa g group on and the balance we're going to need col for. >> in other highlights, the this shall treasury secretary said the u.s. wh, which has not changed, but he said that aid for harvey on the spending could have an impact on the debt ceiling. he added he had not considered whether to go ahead with animation plan to replace andrew jackson on the $20 bill with the famed abolitionist, harriet
tubman. he seemed of a market determined dollar and didn't talk a number. he long-term, a strong dollar is the reflection of market sentiment and a underlying economy, not that a washin dollar makes the country >> up next, why activists investors might be keeping a watchful eye on a small wisc shareholders generally hedge funds with a large stake to use that position to pressure management to effect change in a
company. a midwestern cern for activist town. leslie picker has more from >> when a century old paper mill in brokaw, wisconsin closed a few years ago, the local economy was decimated. many of the people here blame hedge funds. >> now, if somebody coming in out of new york and says here i am, i'm going shut this place down because i want to put $2 more per share in your pocket. as a few greedy investors took over for their own personal enrichment and through workers and the community. >> brokaw is now bankrupt. but its name will live on through a new bill called the brokaw act.
>> so often, their focus is on jacking up the price for maximum profit, but without a view to the long-term. it's creating uphee value. in many instances, this adds transparency. kind of like an early warning system. >> the bill focuses on disclosure. it shortens the amount of time from when a fund takes a large stake in a company from four days ten. and where wl they're working in conjunction with other hedge funds. brokaw's dislike of hedge fund dates ba2011 when a firm took a stake in paper. the company that owned the paper mill. >> they're predators trying to take value from those that create value. designed to get the benefits of ownership without paying for
ownership. >> but krit icritics say it's u to blame them as whole. the paper industry had been on the decline for decades and they had been shuttering mills before starboard even arrived. starboard and a loblying bying , oup did not resp sources familiar with the comment say they're familiar with the bill. i'm leslie picker, wisconsin. sales for the further 11th campbell's food. the food company mk peckations and it's struggling to lift revenue as changing consumer preferences and competition pressure soup sales. the company said a dispute with a retailer over promotiona fell. profits also fell dollar general. the results though still topped estimates. revenue and same store expectat
shares fell 5% to 72.56. and the networking equipment maker, siena, beat street expectations and picked up market share in the latest quarter, but the company reported weak sales guidance and that pressured shares they fell to $21.61 and wells fargo fake accounts scandal we've told you u about may be more scandalous than thought. the bank said an independent 1.5 million more fake ered account, bringing the total to 3 3.5 million. the shares news. and amazon is facing a lawsuit from a couple who claims they damaged their eyes after purchasing defective solar eclipse glasses. prior to the eclipse, amazon had recalled some of the glasses, a recommend manufacturer. shares rose to 980.60.
just yesterday, home depot agreed to pay more than a $5.5 million fine to settle charges that it sold some recalled betwe 2012 and 2016. it's all part of the fight to keep consumers safe. and ra andrade has a behind the scenes loo of dollars of product are stopped and recalled. >> where was this shipment head snd. >> into the the stream of commerce. >> cpsd on the front lines on the wa keep dangerous goods out of the country. >> we lock for hair driers. we look for holiday lights. >> these boxes from china are filled with toys loaded with lead. >> these are incredibly high. >> is the ship in its track, but what about other products we buy every day? the national highway traffic administration regulates cars, the fda, food, drugs and k cosmetics and for thousae cpsc. >> the sales for lead content.
>> goods stuffeded at the port come to the agency's lab here in maryland for more testing. when companies suspect something's wrong with a product, they're require eby la to alert agencies, acting chairman. >> our compliance desk then re it is that that company reported. and makes a determination. >> she says up to 400 products wind up being recalled by agency every year. but how many consumers find out is this. >> most of our recalls will result in about 65% effective rate. >> recalls are not as effective as they could be. >> public interest research group. >>. >> retailers don't want to spend the money, don't want to chain themselves by promoting the recall heavily. >> so he said some critical recalls are never heard. ikea recalled millions of dr last year after four children died when they fell
over. >> 29 million products that had been sold to consumers less than 500,000 consumers, either got a refund or special screws to anchor it to the wall. >> ikea tells us that quote, has been working with the cpsc on the recall of millions of chests and dressers that did not comply with the u.s. voluntary industry standard. we worked with them to develop a comprehensive plan to included national print, digi advertisin. in store and ikea.com communication. media relations, social media promotion, outreach to family members and more. even now, more than a year later, we're proactively reaching out to customers to communicate the recall. but eve knowing about a recall doesn't always mean consumers rush to fix it. according to car fax, there are 63 million vehicles with one unfixed safety recall. that's one in four cars on the road. to find out if a product you own
has been recalled, the government keeps a running list online. that's recalls.gov. and on those registration cards that come with lots of products you buy, make sure to turn them in so the company can reach you if there's an issue. i'm andrade. >> well, while you can't protect your home from an event like r harvey, there are someo prepare protect your property from wet weather. that's comin mortgage rates continue to fall. in fact, they're at a fresh 2017 low and the lowest level since november. freddie mac says a 30 year fixed
rate mortgage averaged 3.82%. returning to their ouston sl properties, homeowners elsewhe proots.rring what t diana oleic looked into that. >> there is no way to keep a home dry in five feet of rain, but storms today are increasingly strong and wet and even a brief storm can cause water dama. >> we try to tell homeowners, it's the water you can't seeth . when your basement leaks, it doesn't decide to leak one day. there's a lot of early warning signs. such at dampness or a musty . discoloration on the walls.
white powder on the walls. install a battery sump back up or generator for it. have wide trenches or french drains dug in the basement that run into the sump pump. look for those early warning signs of leakage. make sure all gutters are clear and running away from the home and if you don't have basement, is well grated away from the slab foundation. as for cost, it can run anywhere for just a sump pump up to 30,000 for foundation repairs, battery back ups and digging trenches and drains. brian said his business has jumped 50% in the last five years due to heavier rainfalls e ds to air sumer concern about quality. he also points to new construction u. froms. >> it's the newer homes that post 1980 that leak faster. the reason why is they were built quicker. >> so how do you choose a waterproofing company?
look for one that's been around a while. many of them offer long-term warranties, so you want to make sure the company is still around if the water comes in again. d advice. "nightly business th does it for "nightly business report" for tonight. i'm sue herera. thanks for joining us, have a .reat evening and we'll see you
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